Obama campaign spokesman: Hey, we never said the mandate was a tax

posted at 5:01 pm on July 5, 2012 by Allahpundit

Really? Last week, the day after the decision, NBC went through the oral-argument transcripts and pulled out all the colloquies where Verrilli had argued for upholding the statute on tax grounds. A taste:

JUSTICE KAGAN: I suppose, though, General, one question is whether the determined efforts of Congress not to refer to this as a tax make a difference. I mean, you’re suggesting we should just look to the practical operation. We shouldn’t look at labels. And that seems right, except that here we have a case in which Congress determinedly said, this is not a tax, and the question is why should that be irrelevant?

GENERAL VERRILLI: I don’t think that that’s a fair characterization of the actions of Congress here, Justice Kagan. On the — December 23rd, a point of constitutional order was called, too, in fact, with respect to this law. The floor sponsor, Senator Baucus, defended it as an exercise of the taxing power. In his response to the point of order, the Senate voted 60 to 39 on that proposition. The legislative history is replete with members of Congress explaining that this law is constitutional as an exercise of the taxing power. It was attacked as a tax by its opponents. So I don’t think this is a situation where you can say that Congress was avoiding any mention of the tax power.

It would be one thing if Congress explicitly disavowed an exercise of the tax power. But given that it hasn’t done so, it seems to me that it’s — not only is it fair to read this as an exercise of the tax power, but this Court has got an obligation to construe it as an exercise of the tax power, if it can be upheld on that basis.

He told Scalia flat out that the mandate “is justifiable under [Congress's] tax power,” leading Scalia to exclaim, with perfect brevity, “Okay. Extraordinary.” That argument turned up in the government’s brief too, on page 52. It would have been malpractice for them not to include it: Congress’s tax power is so broad and the politics of this case so hot that Team O had to put it on the menu as a special for one of the wavering swing justices. Who could have guessed that Roberts, not Kennedy, would be the one who ended up ordering it?

This is the only “tax” I can think of whose goal is to raise zero revenue for the government. Right? If the mandate works to absolute technocratic perfection, it won’t raise a dime because everyone who might otherwise be required to pay it will buy insurance instead and thereby exempt themselves. Sin taxes operate similarly by pairing revenue interests with a state interest in discouraging certain types of behavior, but I think sin taxes are levied in the hope that they will raise some revenue. That’s baked into the scheme of taxing especially tempting or addictive behaviors: Legislators know that not everyone will be able to quit their vice of choice even if it’s suddenly 10 percent more expensive than it used to be, and frankly they don’t care. After all, sin taxes aren’t a linchpin of some broader regulatory scheme whose efficacy depends on them. The mandate is; compliance is more important to the state than revenue raised due to noncompliance. That sounds a lot more like a fine to me than a tax. Although that gets us into the question then of why the mandate penalty isn’t much, much higher than $695 per year. If compliance is key, why make the cost of noncompliance less than the cost of insurance in certain cases? Over time, presumably, they won’t, but in the early stages, when they’re still trying to sell this clusterfark to the public, I guess they have no choice.

Update:Sean Trende counters by arguing that Roberts didn’t expand Congress’s tax power at all wondering how the mandate is any different, really, from subsidizing certain behaviors with tax credits.

(a) Two people make $100,000. There is a 25 percent flat tax imposed, with one exception: a $7,500 credit is allowed for buying a Chevy Volt. A buys a Volt, B does not. A therefore pays $17,500 in taxes, while B pays $25,000 in taxes.

(b) Two people make $100,000. There is a 17.5 percent flat tax imposed, with one exception: a $7,500 surtax is imposed for not buying a Chevy Volt. A buys a volt, B does not. A therefore pays $17,500 in taxes, while B pays $25,000 in taxes.

Don’t think of the mandate as a requirement that you pay the feds a certain sum if you refuse to buy health insurance. Think of it as creating a tax credit for people who already have.

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Comments

What happened to those 40 million without insurance when those same talking heads were supporting the Democrat Congress in cramming this monster down the peoples throats?

aposematic on July 5, 2012 at 6:28 PM

You have a point. Leave out that illegal aliens are not part of the pool so exempt say 20,000,000. so half of that 40, million number need health care coverage. Remove the illegal aliens from the U.S. Population, that leaves the rest of the U.S. population around 300,000,000 people. 1% of 300,000,000, is 3 million. 3 million does not equal 20 million. Of course as we know checking the progressive’s figures is racist/

Exit question: Why would we need to change our entire health insurance industry for “1%” of the population anyway ????

I believe it’s a power grab by the federal government to collapse the private health insurance industry, and push us all into single payer.

Sean Trende counters by arguing that Roberts didn’t expand Congress’s tax power at all wondering how the mandate is any different, really, from subsidizing certain behaviors with tax credits.

Tax credits are not an analogous comparison to taxes. One is a positive and the other is a negative. The Constitution is a charter of negative liberties. It lays out what the Federal government cannot do to its citizens. A tax is imposed upon the citizenry. A tax credit is an inducement by the Federal government that Congress grants through legislative grace.

As the Court noted in United States v. La Franca, 282 U.S. 568, 571 (1931), in a somewhat different context, “a tax is an enforced contribution to provide for the support of the government; a penalty…is an exaction imposed by statute imposed for an unlawful act.” Further, the Court explained as recently as 1996 in United States v. Reorganized CF&I Fabricators of Utah, Inc., et al., 518 U.S. 213 (1996) that “a tax is a pecuniary burden laid upon individuals or property for the purpose of supporting the government.” In contrast, the Court went on to say that, “if the concept of penalty means anything, it means punishment for an unlawful act or omission, and a punishment for an unlawful omission.”

The Democrats could have avoided a lot of the headaches had they simply offered tax credits for individuals, who had to obtain health insurance because they were not covered at work, through a union, Medicare, Medicaid, Tricare, a private policy, or as a result of retirement benefits.

It’s a tax when Obama wants the Supreme Court to believe it constitutional.

It’s a penaltax. It’s a taxalty. It’s whatever we want Julia to believe it is.

It’s a penalty when we’re at war with Eastasia, and a tax when we’re at war with Eurasia.

/Obama Minitrue off

Steve Z on July 5, 2012 at 6:45 PM

If you wingnuts weren’t such reactionary neanderthals, you’d realize that there’s silly at all about this situation.

The Roberts uncertainty principle dictates that one can measure a law in terms of its effect as taxation, or in terms of its punitive effect, but never both simultaneously, since upon measuring one, the wave-function collapses.

I believe it’s a power grab by the federal government to collapse the private health insurance industry, and push us all into single payer.

Dr Evil on July 5, 2012 at 6:41 PM

Of course. Originally Obamacare was going to be a single payer system but they didn’t think they could get it passed that way. What they created is definitely meant as a transition towards nationalized health care. Which is one of the big differences between the MA plan and Obamacare. The Massachusetts plan was meant to be a private system.

I believe it’s a power grab by the federal government to collapse the private health insurance industry, and push us all into single payer.

Dr Evil on July 5, 2012 at 6:41 PM

Of course. Originally Obamacare was going to be a single payer system but they didn’t think they could get it passed that way. What they created is definitely meant as a transition towards nationalized health care. Which is one of the big differences between the MA plan and Obamacare. The Massachusetts plan was meant to be a private system.

The Roberts uncertainty principle dictates that one can measure a law in terms of its effect as taxation, or in terms of its punitive effect, but never both simultaneously, since upon measuring one, the wave-function collapses.

Way to go Soledad. Nice follow up on the “we never said it was a tax” claim even after you admitted you knew the administration said otherwise. Where was the damning quote from the oral arguments? No wonder no one watches CNN anymore.